Estate planners need to be aware of the many changes to the tax structure this season. While several areas have gained national attention, including personal taxes and the alternative tax, several other areas of the tax structure are being affected in 2013 as well. All individuals and families in Maryland who hold funds in trust should be aware that the new tax structure will heavily increase taxation of a trust.
Identity theft is an increasingly common and prominent crime. While most adults are aware of the challenge of protecting themselves against it, few are aware that the main threat can be to their children and others they have a responsibility to protect. Identity theft against adults is a common problem in Maryland and elsewhere, but it does not compare to the threat to those who are minors or have a legal guardianship established over them.
The fiscal cliff held everyone's attention for months. There was tremendous worry on many fronts due to the high degree of uncertainty as to what the new decisions would be. Just last week, this column addressed some of the concerns that the fiscal cliff could have for individuals and families dealing with the alternative minimum tax if a fix were not introduced. Now that at least a short term resolution to the fiscal cliff has been reached, people who engage in estate planning and estate administration in Maryland and elsewhere can take a few steps to improve their circumstances and respond to the new laws, rules and policies that are in place.
Every family member needs to be aware of the need to address end-of-life and healthcare decisions within the family. Healthcare decisions do not merely relate to old age, because many issues can arise for those who are legal adults and typically able to make their own decisions. Accidents and health problems occur that require decisions to be made that people may not be able to make for themselves, so it is important that power of attorney be addressed in Maryland and everywhere else.
In addition to all of the new potential challenges to the middle class in the coming tax year, the alternative minimum tax (AMT) is also finding its way into the ring. The AMT was originally directed at wealthy individuals, but it is increasingly an issue for middle class Americans, including those in Maryland. It can apply to a trust or estate as well as to certain taxpayer incomes.